These fact sheets are for information only. It is recommended that you get legal advice about your situation. These resources have been produced with funding from NSW Office of Fair Trading.
Your Vehicle has been ‘Written Off’
This fact sheet is for information only. It is recommended that you get legal advice about your situation.
Joeseph is comprehensively insured and drives a low value, 10 year old car. It has got low kilometres and he takes good care of it, he only drives it now and then. He is insured for market value, which is probably about $4,000. He was reversing his car and hit a telegraph pole.
He makes a claim with his insurance.
His insurer tell him that they are writing off the car as it is uneconomical for them to repair, they offer him the market value less his excess and rest of his premiums. His registration is cancelled and they deduct that from his pay out too. The insurer is only going to give him $2,100.
Joeseph wants his car back, he won’t be able to buy another car for $2,100.
He wants to get his car back, because he thinks he can just repair it for $1,000.
The insurer tells him they’ve written it off, and his registration has been cancelled.
Who decides whether to Repair or Write Off my car?
Under most car insurance policies it is the insurer’s choice whether to:
- Repair your car;
- Pay you to do the repairs; or
- Declare your car a total loss and “write it off”
There are laws in each State and Territory that outlines when a vehicle needs to be “written off”.
What your insurer can do under your insurance policy sometimes interacts with the law.
If you are uninsured, in some circumstances you may also be affected by the law.
What is the law around Written Off Vehicles?
States and Territories generally acknowledge two classifications of written-off vehicles (WOV):
- WOVs that unrepairable because they are unsafe to repair (sometimes called “statutory write off” or “non-repairable write off”); and
- WOVs that are repairable but which are uneconomical to repair (“repairable write off”
Since 2013 there is a national framework of damage assessment criteria for the classification of WOVs which all the States and Territories are more or less aligned to. These assessment criteria, known as the ‘Damage Assessment Criteria for the Classification of Statutory Write-Offs’, were developed by the National Motor Vehicle Theft Reduction Council (NMVTRC) and Austroads, and promote the consistent application of more stringent assessment criteria for the classification of WOVs.
The national framework applies to light vehicles (under 4.5tonnes) less than 15 years old, and includes cars, motorcycles, trailers and caravans.
There are some differences in each State and Territory as to terminology. For example, NSW immediately deems all WOVs as statutory write-offs (except for solely hail-damaged vehicles), whether they are assessed as unsafe to repair or uneconomical to repair. However, only WOVs which are uneconomical to repair may be repaired if authorisation is granted.
The following is a general summary, and for more detailed information you should contact your local state road authority.
Uneconomical to repair under the WOVR legislation
The damage assessment criteria for a vehicle to be classified as a repairable write-off are generally:
Salvage Value + Cost of Repairs > Market Value of Vehicle (pre-accident) or Sum Insured
If the vehicle has been damaged, dismantled or demolished to the extent that its salvage value as a written off vehicle plus the cost of repairing the vehicle for use on a road would be more than:
- the market value of the vehicle before the accident, or
- the sum insured (if the vehicle is insured for a specified amount).
In most States and Territories if your car is declared a repairable write off you can apply to the state authority to repair the vehicle so it can be re-registered and driven.
The WOVR may then be updated that the car is a “repaired write off”. This may affect the value of the vehicle in the future if you intend to sell the car. This is because the WOVR is designed to protect other road users in respect of purchasing cars that have had substantial repairs.
Unrepairable or “statutory” under the legislation
In all States and Territories, vehicles that have been written-off as unsafe to repair cannot ever be re-registered. Generally the vehicles will have to have sustained certain types of damage.
A summary of what is considered a statutory write off appears below. There are minor differences in every State and Territory and so you should check with your local authority.
|Type of vehicle||Damage Type||Conditions|
|Motorcycles||Impact||The suspension is damaged, and at least 2 areas of the structural frame are damaged.|
|Salt water immersion||A motorcycle is fully immersed in salt water for any period.|
|Fresh water immersion||A motorcycle is fully immersed in fresh water for more than 2 days (48 hours)|
|Fire damage||A vehicle is burned to such an extent that it is only fit for wrecking or scrap.|
|Malicious/theft/stripping||Has been stripped of all, or a combination of most, interior and exterior body parts, panels and components.|
|Light motor vehicles up to 4.5 tonnes GVM||Excessive structural damage||A vehicle has excessive structural damage if three indicators are found in the vehicle. (Indicators are listed in the ‘Damage Assessment Criteria for the Classification of Statutory Write-Offs’.|
|Excessive fire damage||A vehicle has excessive fire damage if:
a) As a result of fire, paint on the vehicle (whether internal or external) has blistered on any three of:
i) the roof
ii) a pillar
iii) the floor pan
iv) the firewall
v) longitudinal structural rails or chassis, or
b) as a result of fire:
i) the vehicle has sustained a combination of exterior and interior fire damage
ii) the vehicle has suffered damage to the extent that it is written-off
|Excessive water damage||A vehicle has excessive water damage if the internal cabin of the vehicle has been inundated with water (irrespective of whether the water is fresh, brackish or salt water) to a level above the level of the inner door sill.|
|Excessive stripping damage||A vehicle has excessive stripping damage if:
a) It has been stripped of interior or exterior parts, panels and components such as wheels, bonnet, guards, doors, boot lid or interior parts, or
b) By reason of that stripping it is written-off.
I am insured, and my insurer as declared my car a write off or won’t declare it a write off – can I dispute it?
They’ve written my car off
When you are insured, an insurer can make an “election” under the insurance policy as to how they settle your claim.
The WOVR law also allows them to choose to:
- repair the car even if it is “uneconomic” per the law’s definition to do so as long as they get an authorisation and meet the other requirements; or
- declare it a WOV and place it on the register.
The insurer will generally obtain the quotes about the cost to repair and determine value of the salvage. You may think the insurer is wrong.
If they decide to declare it a write off the problem is you have a very small window of time to raise the dispute, as the insurer is obliged to notify the WOVR very quickly (up to 7 days from the assessment). Once the insurer notifies the WOVR you will generally struggle to get them to change their mind, as they will need to amend the WOVR which requires them to amend their original assessment.
If the car is declared as having “non-repairable damage” it will be very difficult to resolve the dispute without getting significant evidence that the legislative requirements of a non-repairable car have not been met and the insurer was wrong.
If the car has sustained repairable damage, and you want your insurer to repair your vehicle you will need to get some evidence to support your claim that the repairs or salvage value are cheaper than the market value of the repaired vehicle. Think about getting:
- Quotes from a salvage yard regarding salvage value (or visit www.pickles.com.au)
- Quotes from a smash repairer about what the repairs should cost
- Evidence of market value of your vehicle (pre-accident) (visit redbook.com.au or www.glassguide.com.au)
If your calculation of repairs plus salvage is lower than the market value you should give that evidence to the insurer IMMEDIATELY and ask them not to report your vehicle to the Written Off Vehicle Register (WOVR).
You need to be mindful that your insurers quotes may differ from yours as they need to repair the car to certain standards and guarantee those works. Your smash repairer you get quotes from may not be repairing all the damage and may not be guaranteeing the work. Your quotes must be for the same level of repair as the insurers level.
If your insurer has written off the vehicle you could ask to salvage the vehicle, and ask for them to pay you the cost of repair. If you do this you need to remember that:
- If your car has non-repairable damage you won’t be able to do this;
- You will need to get an authorisation to repair and meet your State requirements to get the authorisation and your insurer may not be liable to pay you to do this;
- Your car will be on the WOVR as a formerly written off car or repaired write off which may substantially reduce its value;
- Your policy with your insurer will come to an end as you have been paid out a “total loss” and your insurer may not want to continue to insure your car in the future;
You can take your dispute to Internal Dispute Resolution of the insurer (See our Factsheet on Insurance Dispute Resolution) and on to the Financial Ombudsman Service. FOS does not have any jurisdiction to compel the WOVR to remove a listing, and may not make a finding to compel the insurer to amend the WOVR.
They won’t write off my car
Sometimes after you have been in an accident you may not feel safe in your car, even if they fix it.
As outlined above, if it is economical and the damage does not meet the non-repairable damage standard then the insurer can choose to repair your vehicle.
You would need to gather lots of evidence that the vehicle sustained non-repairable damage.
Most insurance policies expressly exclude any losses resulting from the depreciation of the value of the vehicle. It is not arguable that the depreciation of the vehicle is a reason to write it off.
It can be very difficult to compel an insurer to write off a car where it can be repaired.
You can take your dispute to Internal Dispute Resolution of the insurer (see our factsheet on Insurance Dispute Resolution) and on to the Financial Ombudsman Service.
I am uninsured – can the other party’s insurer write my car off
Sometimes the at fault parties insurer may ask to assess your vehicle. They may even offer to repair it for you.
You need to be mindful that when an insurer assess a vehicle they have obligations under the “Written Off Vehicle Register” irrespective of whether you are there customer or not.
All insurance companies who assess cars (whether it be the car of their own insured or not) are obliged to notify the WOVR. Once the WOVR is notified it may be impossible to remove.
As an uninsured party who is not at fault, you are entitled to your “common law damages” to put you in the position you were in before the negligence.
The usual measure of damage in a motor vehicle repair claims is as follows:
Reasonable repair cost of damage incurred or market value (whichever is the lesser)
PLUS towing costs
PLUS demurrage (hire car costs, lost wages or profits etc– limited to “reasonably incurred”)
LESS salvage (when it is written off)
The damages you can recover is limited to what is ‘reasonable’ given the circumstances (such as the age / make / model / condition of the other car, and the availability of car repairers in the area).
If your car is at risk of being written off because the repair cost may exceed the market value of your car, you should not let the insurer assess your car if you do not want your car on the WOVR as written off.
Instead you should send a letter of demand to the insurer with the repair bill. If the repair bill exceeds the market value of your car, the insurer can pay you the market value instead. You would then need to contribute any additional costs to repair the car if you wanted to repair the car.
My car is already on the WOVR
Once the insurer has notified the WOVR it is impossible to remove the listing unless the insurer agrees they were wrong. Unfortunately, insurers and their assessors are usually very quick to report cars to the WOVR.
In some States you can obtain an authorisation to repair a repairable written off vehicle.
A vehicle that has been placed on the WOVR may diminish in substantial value. So, if you decide to salvage the vehicle and undertake an authorisation to repair you need to be aware that it will always be a “repaired write off” or “former WOV” on the WOVR.
Once it is repaired it is still on the WOVR, this is to notify potential purchasers that the vehicle has sustained damage in an accident and has had substantial repairs. The purpose of the law is to protect other road users and not necessarily the owner of the vehicle.